I. Under a 75% LTV term loan structure, when is the balance of funds released by the lender to the vendor?

A. After the borrowers equity contribution, before the delivery of the asset to the borrower.

B. After the borrowers equity contribution, and preferably after the asset is in the borrowers possession.

C. Before the borrowers equity contribution and the delivery of the asset.

D. Before the borrowers equity contribution, after delivery of the asset to the borrower.

II. In which option are the steps to capitalize off-balance sheet obligations given correctly?

A. Adjust the balance sheet to include only a long-term portion of debt, reconstruct the income statement by adding lease payment back to EBITDA, calculate key lending ratios after all adjustments

B. Adjust the balance sheet to include both a current and long-term portion of debt, no adjustments needed in the income statement, calculate key lending ratios after all adjustments

C. Adjust the balance sheet to include both a current and long-term portion of debt, reconstruct the income statement by adding lease payment back to EBITDA, calculate key lending ratios after all adjustments

D. Adjust the balance sheet to include both a current and long-term portion of debt, reconstruct the income statement by adding lease payment back to Net Income, calculate key lending ratios after all adjustments

III. One of the methods used in adjusting the liabilities section of the balance sheet (to analyze Operating Leases) is taking ______ of all future lease payments. Which phrase below completed the sentence correctly?

A. a percentage

B. the NPV

C. the absolute value

D. none of the above

VI. If a borrower wanted to pay out a lease before termination, what would they be required to pay?

A. The principal amount

B. Sum of all future payments

C. Net balance outstanding

D. Breakage costs outlined in the contract

IV. In a sale-and-leaseback transaction, the borrower turns over _______ of the asset to the lender, while the asset remains on their ________ . Fill in the blanks. (Hint: last space is 2 words)